The rupee pared some of its early gains and settled 3 paise higher at 74.30 (provisional) against the US dollar on Wednesday supported by positive domestic equities and sustained foreign fund inflows.
At the interbank forex market, the domestic unit opened at 74.34, against Tuesday's closing of 74.33 and finally ended at 74.30 against the greenback, higher by 3 paise over its previous close.
During the day, the local unit witnessed an intra-day high of 74.24 and a low of 74.46 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, advanced 0.06 per cent to 93.07.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 1,481.20 crore on Tuesday, according to provisional exchange data.
The 30-share BSE benchmark Sensex was trading 83.06 points higher at 38,926.94 and the broader NSE Nifty rose 38.20 points to 11,510.45.Brent crude futures, the global oil benchmark, rose 0.02 per cent to USD 45.87 per barrel.